I am not retired, but I hope to retire well. I am 40 and for the last 4 years have worked as a programmer for a state agency here in Arizona.State workers have not received a raise in 5 years, and this year is not looking like it will happen either.

When I started here, I took a 5% pay cut, which I though was a fair exchange for the state benefits, namely the pension.Four years later my salary has stagnated, while the going rate in the public sector for programmers with my skills has gone up 10-20k.

My question is, at what point is a pension not worth it? I like the security of it, but as the wage gap increases, I wonder if I could just make my own investments with the extra money from a higher salary.

My question is, at what point is a pension not worth it? I like the security of it, but as the wage gap increases, I wonder if I could just make my own investments with the extra money from a higher salary.

There are a couple of other things possibly more important for you to weigh.

How secure is that pension, and what are its provisions? Government pensions are subject to the whims of the politicians in office when the benefits are being paid unless they're buying a third-party annuity during your working years. Along the same line, what about inflation? When my mother turned 65 the state of Kansas sill had mandatory retirement at that age. (It's since been outlawed for most occupations at the Federal level.) In the last couple of years before her death at 89 her pension wasn't enough to pay her health insurance premium.

Are you also paying into Social Security? If not, your SS benefit could be reduced by the Windfall provision. If that applies you can read up on that at www.ssa.gov.

DW and I both worked for governments for a short time back in the 70s, she for the state of MN and I for Hennepin County (Minneapolis). Until a few years ago I thought we might have been better off sticking with those jobs than entering the private sector.

While we earned much more and amassed a comfortable nest egg in the private sector, had we risen to equivalent career levels with government, we could have retired early (as we actually did) and our pensions today would likely be more than the cautious annual withdrawl we take from our private portfolio. And after all, the portfolio is subject to market forces while the pensions would have been guaranteed by the taxpayers of MN and Hennepin, right?

Maybe not so right. The way finances are starting to unravel in various places due to irresponsible pension and benefit promises made to public employees in the past, might well have me reassessing that sense of security.

Something to keep in mind while trying to determine if your state pension is worth it... Does the pension cover state legislators? That's the saving grace of my husband's state pension. To trash the pensions of state college Retirees, legislators would have to trash their own pensions. I'm pretty confident that won't happen!

My husband plans to retire next year with 10 years of service, so the pension will be small (something like $700/month with the 100 % survivor option), but he can also stay in the health plan at the employee rate (he was grandfathered--you now need 15 years for that bennie), which turns into a Medicare supplemental at age 65 at the same premium (well, the premium is apt to be higher a few years from now).

Oh, it sux to have a pay freeze--BTDT, sorry it happened to you.

Something else to keep in mind while you make decisions about future employment...Private sector programmers are often laid off in their 50s, so do try to save what you need to retire on by then.

Somewhat off your point, but it seems clear that the several government entities didn't (and don't) have money in the budget for current salaries. The pensions are later, from someone else's budget. Moves the pain til later. Those chickens are coming home to roost.